Independent Cost Benefit Analysis
of the Yuendumu Mediation and Justice Committee
20
15
10
5
The Yuendumu Mediation and Justice Committee (YM&JC)
is an innovative, responsive and highly effective Indigenous
designed and driven community initiative that has succeeded
in restoring stability and harmony to the community of
Yuendumu. By doing so it has played a powerful role in
breaking cycles of disadvantage, distress and suffering
caused by unmanaged community conflict. It is a positive
and compelling example of the drive, vision and commitment
of Aboriginal people in Central Australia to take control
and responsibility for matters in their community and their
effectiveness and skill in doing so. The Central Desert
Regional Council (CDRC) established and managed the
YM&JC as part of its responsibility for service delivery to CDRC
residents. The Commonwealth Department of Prime Minister
and Cabinet was the principal funder.
2698of the University of Canberra, directed
Professor Anne Daly,
an independent economic Cost Benefit Analysis of the
YM&JC. This rigorous CBA establishes that the YM&JC delivers
Australia a substantial economic net benefit. The present
value (PV) of its benefits
3114 outweighs its costs 4.3 times over.
This is a very high rate of return on society’s resources
consumed in the project . The difference between the benefits
and costs, the Net 593
Present Value (NPV), is a substantial $14.2
Community
million dollars over the ten year period
of analysis.productivity
1726
Healthier children
Total costs PV
$4,359,000
Total benefits PV
$18,522,000
Healthier adults
4.3
Health services
$14,163,000
Children’s education
1798
The YM&JC is clearly a very efficient use
of Australian
Housing
repairs
315
resources. *
CJC support
This conclusion is strengthened by the inclusion of sensitivity
Prisons extensive
and distributional analysis. The CBA involved
consultation with the
Courts
4136 major stakeholders.
1412
Benefit Cost
Ratio
NPV
The YM&JC benefits are broadly based. The benefit of reduced use
of resources comes from several government departments covering
health, housing, mediation, courts, prisons and policing. The
benefit of greater productivity of existing resources comes through
Yuendumu community services, better education and better health
outcomes.
Costs and benefits of the Yuendumu Mediation and Justice
Committee over a 10 year period
2014 dollars discounted by 2% over ten years
20
2.7
15
3.11
Inputs:
Labour and materials
Purpose:
Improved community
services
Costs
Benefits
4.14
Children’s education
Housing repairs
CJC support
.72
2.37
Courts
Policing
1.73
2.01
Peace Park
YMJC members time
YMJC resources
$million
Costs
Benefits
The graph above compares the costs and benefits of the
Yuendumu Mediation and Justice Committee. It looks
at this over a 10 year period. Ten years is good amount
of time to get a clear picture of both the costs and the
benefits of the work of the Committee.
Measurement:
Market price
This CBA supports a wider use of the YM&JC mediation
model. For example, the proposed Willowra Community
Mediation Service would be expected to give a
substantial positive economic return. The Central Desert
Regional Council (CDRC) is seeking funding to extend
the YM&JC model to Willowra as part of its responsibility
for service delivery to CDRC residents.
* In a recent OECD publication “A ratio below 1 is considered poor,
Measurement:
Labour
productivity
Purpose:
Improved health and
education
Health services
Prisons
.26
Purpose:
Improved child welfare
Measurement:
Market price
1.41
5
police, courts, prison, health, CJC, housing
Output:
Peace
Healthier children
.32
Purpose:
Freed government resources
Activities:
Mediation, training,
prison visits
1.73
1.8
YM&JC impact chart
YMJC
Community productivity
Healthier adults
10
259
The settlement of community conflictPolicing
in Yuendumu is a
1726 process using significant economic resources.
continuing
The peaceful settlement
of these violent conflicts will free
719
Peace Park
resources for other economic opportunities,
increase the
productivity
of resources
in Yuendumu
andmembers
provide major
2374
YMJC
time
2011
benefits to the people of Australia. The
Yuendumu
Mediation
YMJC
resources
$million and Justice Committee minimises the resources required for
conflict
resolution
and makes investments the community
Costs
Benefits
more productive.
.59
a ratio between 1 and 1½ low, a ratio between 1½ and 2 medium
and a ratio above 2 high” (Persson & Song 2010:33). For comparison
the World Bank (2011:4) estimates benefit cost ratios for Indonesian
urban sanitation projects at 1.1 to 2.4, the Productivity Commission
(2013:27) estimates the benefit cost ratio of smart electrical meters
at 2.7 and the South Australian Centre for Economic Studies
(2010:95) estimates a benefit cost ratio of Opal fuel at 3.7.